Starting an online business. What regulations must you adhere to?

by Startacus Admin

Thinking about starting an online UK-based business? This advice from Amanda Hamilton, Chief Executive of the National Association of Licensed Paralegals might just help...

If you are starting an online business there are a number of statutory or regulatory requirements you are obliged to adhere to or fulfil. 

Most online sales come under the Consumer Contracts Regulations 2013 which came into force on the 13th June 2014. 

In essence, the burden lies with you, the seller, to provide all necessary key information to consumers.

Information you must share

• A description of what is being purchased, the total price and how it is calculated

• How the consumer can pay for the items with details of any additional costs and when the item will be delivered 

• Details of your customers right to cancel, the cost of returning, and who pays for the cost of returning items

• In respect of digital items, information on the compatibility of hardware and software as far as you can reasonably be expected to be aware

• The geographical location of the seller or the trader on behalf of whom the seller is selling

• Details of how to cancel the purchase

Cancellation

A consumer’s right to cancel under the Act starts as soon as an order is paid and ends 14 days after receiving the items or last of a batch of items. If services are being purchased online then the right to cancel starts as soon as a contract is signed and ends 14 days later.

If you do not provide all the necessary information to consumers, then you can be sanctioned under the Consumer Contracts Regulations and the length of time your customer has a right to cancel may be extended from 14 days to one year.  

The rights afforded to consumers online under these regulations, are greater than buying face to face which are covered generally by the Consumer Rights Act 2015.

Refunds

You are obliged to refund the cost of the item and standard delivery within 14 days after receiving the returned item or within 14 days of receiving proof of that item being returned (for example, proof of posting). On the other hand if you have agreed to collect the returned item, then a refund should be forthcoming within 14 days of cancelling the contract, whether or not the item has already been collected.

Exceptions

For example, DVDs, CDs or items where there are seals that are broken including seals that are there for health or hygiene purposes, such as underwear are not covered by the Consumer Contract Regulations. Also, bookings relating to hotels, flights or car hire are exempt. That does not mean to say that there is no redress for the consumer on these types of purchases, but that they are exempt for the purposes of the Consumer Contract Regulations 2013.

Services

If you offer services, such as membership of a dance studio, and a consumer decides to cancel after having attended a few times within the 14 day period, then any refund may be reduced to allow for the benefit that the consumer has received.

T&Cs

Your Terms and Conditions must be readily available so that consumers can check certain information before purchasing anything. While the minimum period of cancellation under the Regulations is 14 days, you may decide to extend this for certain items or at certain times of the year – that choice is yours. 

Digital Downloads

As a seller you must not supply a digital download – be it music or software – until the 14day cancellation period has passed to allow consumers, to be sure this is what they want. However, consumers can give their express permission to receive it sooner, in which case, their right to cancel is lost. In practice most consumers click ‘download now’ and receive their digital item immediately, so their right to cancel is lost. However, it must be made clear that if they do this, they lose their right to cancel. 

Helplines

It is strictly prohibited under the Consumer Contract Regulations to charge in excess of a normal call rate to any helpline. In other words, no premium rate numbers are allowed!

With all that has been going on this year, and the huge increase in online buying, it’s important to understand your rights and the rights of the consumer, so that both parties are protected. Be sure to keep your terms and conditions up to date and clearly visible and accessible to the consumer.

 

ABOUT THE AUTHOR

Amanda Hamilton is Chief Executive of the National Association of Licensed Paralegals (NALP), a non-profit Membership Body and the only Paralegal body that is recognised as an awarding organisation by Ofqual (the regulator of qualifications in England). Through its Centres, accredited recognised professional paralegal qualifications are offered for a career as a paralegal professional. 

 

 

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Published on: 7th January 2021